Online and Mobile Video Ad Spend See Biggest Gains in the UK

Mobile video spend will grow by leaps and bounds

Video continues to be one of the biggest drivers of digital ad spending growth in the UK, on both PCs and mobile devices. The format, which is expensive to produce but offers some of the most engaging digital advertising, is helping display spending begin to take share away from search, both online and on mobile.

eMarketer forecasts that this year will be the first time search’s share of the UK digital ad spending pie declines, albeit slightly, while display will begin to grow its share, after a slight drop between 2011 and 2012.

Digital video ad spending is set to continue growing by over 50% through 2015, after more than doubling in 2011. That is the fastest growth rate of any of the digital formats by a wide margin.

But video’s share of overall digital ad spending is still small, though its share of digital display spending will grow significantly, from 3% in 2012 to 11% by 2016, when video will reach £846 million ($1.23 billion), up from £169 million ($268 million) in 2012, according to eMarketer estimates.

On mobile, the trajectory for video is even more dramatic.

2013 will also be the first time UK search spending’s share of total mobile internet ad spend begins to decline—and by a wider margin than in the overall digital market—from a high of 72% in 2012, down to 68.8% this year. By 2016, eMarketer estimates 64% of mobile ad spending will come from search.

Mobile display spend, meanwhile, will more than double again this year, after already doubling in both 2011 and 2012. This will bump display’s share from one-quarter of mobile spending in 2012 to 34.3% in 2016. While the share going to banners and text formats—under the display umbrella—will stay relatively flat, video will rise from a miniscule 1% of mobile display ad spending last year to 8% by 2016.

Much of overall mobile display growth, especially video spend, will come from investment in tablet advertising formats, which offer diverse options for interactive video and display advertising. Mobile video is expected to rise by a whopping 366% this year, after seeing over 300% growth in 2011 and over 500% growth in 2012. UK mobile video ad spend will continue more than doubling annually through 2015.

In total, mobile video will reach £233 million ($370 million) in 2016, up from £1 million ($1.59 million) in 2011. This will also give mobile video a 28% share of overall digital video spend.